I sold a home in PA in 2023. Sold for same price I paid for, and accounting for other costs sale was a net loss. However, owned less than two years, so had to work through taxable sale worksheets. After working through the house sale worksheet for federal, turbotax determined I had a $44K loss and indicated that I don't need to report the sale.
Now when working on my PA state return, I work through the"taxable sale of a principal residence" section and on the net gain or loss screen turbotax states "Your net Pennsylvania loss on the residential part of the sale of your personal residence is $43,914.00. This will not appear on your tax return." after it imports the information from the federal worksheet. However, on the Pennsylvania incomes/deductions summary screen, it lists the $43,914 as "Sales, Exchanges, Dispositions" income, ultimately leading to me owing $1400 in income tax on the loss amount.
I think this is a bug in the carryover from the worksheet, and would appreciate some help tracking this down.
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Definitely there is no gain in PA and should not create any taxable income from the home sale. It could be more beneficial if you would like to send a diagnostic copy for us.
If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help. If you would like to do this, here are the instructions:
TurboTax Online:
Go to the black panel on the left side of your program and select Tax Tools.
TurboTax CD/Download:
If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:
We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.
Thanks for the quick reply. I shared a copy of my return - the token number is 1174776.
Oh, and state is Pennsylvania.
Any progress on fixing this bug?
Is there another state in your file besides PA?
Here is the solution. Since this is not a reportable transaction because it is an overall loss on the sale my advice is to remove all of the information from the federal return. This removes it from the Pennsylvania (PA) return and corrects the balance due. As indicated the sale is a personal loss and is not allowed to offset any other income on the federal return. As far as PA goes, they do not allow any personal use property losses either. Your return is completely correct without the disallowed loss.
This will resolve this experience without issue because the information that is not required to be reportable is not actually sent with the return data.
Keep all of your documents related to the sale and purchase of this home with your tax records for at least three years.
Thanks for the help on this - I'll go ahead and remove the sale as you suggest.
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